Bank Fees Survey: Less Than 1 in 3 Banks Offer Free Checking

MoneyRates.com posted results from a survey regarding bank (not credit union) checking account fees. 100 banks’ checking accounts were scrutinized, including 50 large banks, 25 medium-sized banks and 25 small banks. The results reveal that in the last 6 months since the survey was last conducted, higher costs and downward pressure on non-fee revenue sources are driving fees up and the balances required to waive those fees are also up. Another trend is fewer free checking offers are available. From MoneyRates.com’s press release:

….free checking continued to get harder to find. “Free checking” generally refers to accounts that do not charge a monthly maintenance fee. Already a minority, the number of accounts offering free checking shrank from 28.75 percent to 28.11 percent over the past six months. That means fewer than one out of every three checking accounts is free of monthly maintenance fees. This represents a significant cost, with the average of these maintenance fees totaling nearly $159 annually.Of course, banks generally will waive the monthly maintenance fee if you carry a sufficiently large balance, but here too the trend is squarely against consumers. The average balance necessary to qualify for a fee waiver jumped by 31.9 percent to $11,469.25. This means that smaller customers are less likely to qualify for a fee waiver, and in turn those monthly fees will represent a larger proportion of smaller balances.

For those customers not willing to pay the fees or just don’t have 5-figure deposits lying around to park in a checking account, there will be continued flight to alternatives. This could be on-line only banks that tend to have lower cost accounts, prepaid cards that have most if not all of the same features as a traditional checking account, or to smaller financial institutions that are not covered by the Durbin amendment and still are earning higher interchange to help support account costs.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group